Stimulus And The Tyranny Of ‘Practicality’

The House passed Joe Biden’s $1.9 trillion virus relief bill early Saturday.

It was not a bipartisan affair. There was no Republican support and two Democrats voted against it. The final vote was 219 to 212.

The legislation, with which most Americans are by now at least vaguely acquainted, increases payments under a key federal unemployment supplement to $400 from $300 and extends them through the end of August. They were poised to expire midway through next month. The bill also increases the child tax credit, provides $200 billion for primary and secondary schools, $350 billion for state and local governments, and allocates in excess of $50 billion for vaccine distribution.

Kevin McCarthy, in characteristically hapless comments, said the bill “fails to deliver for American families.” Prior to the vote, he rolled out a series of misleading claims in an attempt to undermine public support or, more likely, say the “right” things to Republican donors.

Try explaining to “American families” that smaller is actually larger. That less money for the cash-strapped governments in their communities would mean better outcomes than more money. Or that a “targeted” approach is preferable because it might “save” the federal government a few percentage points on a meaningless budget statement denominated in a currency that the same federal government issues.

If you’re a Trump acolyte, maybe McCarthy can explain to you why this plan, which carries virtually the same price tag as the proposal Trump and Steve Mnuchin were pushing in October, is “too big.” Sure, McCarthy would point you to elements of the Biden plan that Trump presumably wouldn’t support, but he couldn’t plausibly point to the $1.9 trillion headline. I suppose you could sum this legislation with the package passed in December and argue that the combined figure is considerably larger. But in addition to being apples to oranges, recall that at one point in October, Trump told Rush Limbaugh that “I would like to see a bigger stimulus package, frankly, than either the Democrats or the Republicans are offering.” Presumably that meant more than the modified HEROES Act, a $2.2 trillion piece of legislation. Some suggested Trump may have meant more than the original HEROES Act, which carried a cost of $3.4 trillion.

Of course, it’s difficult to know what Trump actually meant. October’s stimulus wrangling played out when he was still taking a cocktail of medications following a serious bout with COVID, and he was also keen on sending a message to voters that if anyone was going write a multi-trillion check on America’s account, it was going to be him.

The Biden plan includes $1,400 stimulus payments, a figure which bridges the gap between the $600 payments from the December virus relief proposal and the $2,000 figure demanded by — wait for it — Trump. It is by no means clear that we’d be talking about $1,400 in additional stimulus checks right now were it not for Trump’s advocacy late last year. When he called the $600 checks “ridiculously low,” that was it for Republicans. One way or another, $2,000 was going out eventually. From that point forward, Democrats looking to support larger payments could cite the GOP’s cult leader.

In any case, McCarthy is often especially difficult to stomach. Mitch McConnell may be “the gravedigger of American democracy,” as Christopher Browning famously wrote in 2018, but at least McConnell’s laconic, dead-eyed manner and otherworldly shamelessness is something worth studying, if only to decry it as the quintessential modern example of the corrupting influence of power politics. McCarthy, by contrast, often comes across as little more than a mousy, blundering, simpleton.

The bill will now move to the Senate, where the real arguing will take place. The House version does contain the $15 minimum wage hike, but in its current form, it’s DOA in the Senate. Bernie Sanders and Ron Wyden will apparently attempt to work around the unfavorable parliamentarian ruling that prompted outrage among Progressives. Kamala Harris isn’t inclined to override that ruling and Biden likely won’t back abolishing the filibuster. In all likelihood, the minimum wage increase won’t be in the final legislation — or at least not as currently written.

Nancy Pelosi knows that. “This is a spectacular piece of legislation. While the Senate has prevented us temporarily from passing one aspect of it, let us not be distracted from what’s in here, because it’s a great bill,” she said.

That’s the practical approach. But I’d note that practicality seems to be at odds with common sense on quite a few fronts in American politics these days. It makes no sense to argue that people can live comfortably on $7.25 per hour, or $10 per hour, or really, on $15 per hour. Do the math for yourself. It just doesn’t work.

The same thing goes for climate change. The evidence to suggest that the planet is in peril isn’t just overwhelming, it’s readily apparent to people with working eyes. For example, have a look at the feature picture on “The Vanishing Wild,” a recent piece by Jon Lee Anderson for The New Yorker. I don’t expect anyone to read the entire piece, although I certainly recommend it to anyone so inclined. The visual shows a giant bridge cutting through the rangeland. There are two zebras, one of which is staring vacantly at something in the distance.

The point is just that so many of the proposals and initiatives branded “radical” by centrist Democrats and Republicans (everything from universal healthcare to green energy) aren’t really “radical.” Rather, they’re the product of rational people seeking to address obvious problems, some of which are existential in a very literal sense.

Consider the following. US lawmakers are in a position to influence how an empire chooses to allocate resources. When you control the power of the purse in an empire, it’s incumbent upon you to recognize and address existential threats to society (e.g., poverty and pervasive economic hardship) and to humanity more generally (e.g., climate change).

US politics seems to become more detached from reality and common sense all the time. It’s not enough for multiple crises to unfold in plain sight. They have to wreak havoc before lawmakers in the US will address them. And even then, the process is painfully arduous and common sense is habitually subjugated to what establishment politicians unironically call “reality.”

But “reality” isn’t the deficit or any other imaginary “line in the sand.” And citing adherence to procedural rules lawmakers themselves devised in order to explain why multitudes of wage workers have to persist in a state of precarity is the opposite of reality — it’s a kind of inadvertently deadly insanity.

When Pelosi says things like “the Senate has prevented us…,” she’s speaking self-referential nonsense. “The Senate” can’t “prevent” anybody from doing anything. “The Senate” is just the name of a chamber. It’s people who are doing the “preventing.” And that’s the key point. That’s what Progressives have picked up on and are now (loudly) communicating to the public.

History is increasingly prone to antiquating GOP positions on a number of issues. Conservatives claim to be victims of a multi-faceted conspiracy to “radicalize” every aspect of American society, from gender roles to budget orthodoxy. In reality, though, the only thing that’s “conspiring” against them is the implausibility of their positions in a modern world. I could cite dozens of examples, but I’ll refrain. Instead, I’d just note that centrist Democrats risk falling into a similar trap by driving a wedge between “practicality” and common sense. The public is tired of the practical excuse, no matter who’s leaning on it.

In the US, rent-seeking corrupts the legislative process. The cynical among you will note that all lawmakers eventually succumb to lobbying and special interest capture of some kind, even if they don’t realize it. Lobbyists advocating for “good” causes are still lobbyists, after all.

What’s becoming clearer and clearer over time, though, is that the US legislative process isn’t conducive to getting things done at all, let alone efficiently. The machinery moved fast in March and April of 2020, but that’s not very comforting. At that point, the collapse was upon us. As much as I endeavor to avoid trafficking in any sort of bombast (unless it serves an ironic or comedic purpose), I always find myself coming back to the same question about 2020: What if it was a hemorrhagic fever?

In many respects, the US (as a nation) only survived COVID because the virus wasn’t particularly deadly. The government’s response was everywhere and always behind the curve. It remains so to this very day.

Even after watching more than a half-million people die and seeing the entire services sector effectively disappear overnight, lawmakers on both sides of the aisle persist in pedantic adherence to rules of their own making and, ultimately, to a document (the Constitution) which spent the last four years being exposed as woefully flawed and totally incapable of protecting the people from a tyrant.

All of this is exceptionally disconcerting, and not just for Americans.

US lawmakers are completely detached from the real world and from common sense. They cite documents and rules of their own creation as constraints on their capacity to address crises both at home and abroad. And they allow the non-binding dictates of soft sciences to masquerade as natural laws, thereby establishing dominion over policymaking and defining the contours of what’s possible.


 

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22 thoughts on “Stimulus And The Tyranny Of ‘Practicality’

  1. If you print money to pay for things, that will generate inflation. When you generate inflation, that hurts the middle 75% of the population. It helps the bottom 20% for a moment as they get more money. It helps the top 5% who have assets that earn their way through inflation, and then which benefit from the decreasing burden of inflated debt.

    But the folks who save in, are paid in, or who receive pension in dollars. Those people are being sold down the river. A TV set for you today, but you’re really engorging the people who have the assets and owe the debt. And, honestly, those people don’t need more money — it just appears that they are going to get it through expedient political means like this where money is created without taxation and given away like it actually was a store of value.

    With policies like this, money is not a store of value, but melting ice cream cone meant to be consumed quickly before it is worthless.

    1. With apologies, this is a woefully simplistic comment, starting with this: “If you print money to pay for things, that will generate inflation.”

      As I’m sure you’re aware, that has not proven true over the past dozen years, and longer than that in Japan.

      With all due respect, you’re just parroting the first three chapters of an undergraduate economics textbook.

      Remember this letter? … https://blogs.wsj.com/economics/2010/11/15/open-letter-to-ben-bernanke/

      The part about “distort[ing] financial markets and greatly complicat[ing] future Fed efforts to normalize monetary policy” turned out right, but the rest is now enshrined in history as so hilariously wrong as to cast considerable doubt on the intelligence of the people who wrote it.

      1. Everyone who signed that letter should never have been taken as an economist again. They weren’t just wrong. They were “sun is at the center of the universe” wrong. And just as importantly it was cruel.

    2. I’ve been hearing this same story for 40 years since the problematic inflation of the early 1980s. If a deficit of over a 1 trillion dollars and a debt of nearly 30 trillion isn’t moving the inflation needle, it might be time to check your assumptions regarding money printing.

    3. What irks me is the people that shout deficit and inflation when money is printed to help people. But if they want more military hardware, a bailout for banksters or a twenty year war; “deficits don’t matter” as Mr. Cheney said and as the Republicult has demonstrated repeatedly over the course my lifetime.

      1. Not funny how that stuff works. The republic has some rot. If DC doesn’t start thinking instead of the lunatic game they play, this country will change in a way no one will like.

    4. Apparently you missed the bit where inflation is good for debtors, and not so good for lenders. I’ll let you figure out what proportion each of those groups represents in the US population.

  2. If you print too much money you have to get inflation. The question is how much is too much. If the money is used for rent, food, gas and other necessities then that shouldn’t affect inflation. I am totally for the the stimulus (and other infrastructure projects) but given the last few days i am a little concerned.

    1. “If you print too much money you have to get inflation”

      No, you don’t.

      You probably will. But you might not.

      We have to (have to) stop speaking about the economy, money, companies, stocks, bonds, etc., as though they’re subject to immutable laws.

      They aren’t.

      Saying “If you print too much money you have to get inflation” is NOT the same as saying “If you jump out the window, you’ll hit the ground eventually”

    2. “If you print too much money you have to get inflation.”

      What is “too much?” The US government has over a trillion dollar deficit and close to 30 trillion in debt. Where’s the inflation?

      The hard money folks have been spectacularly wrong and continue to be so. It’s clear that the US government’s capacity to print money without causing inflation has been woefully underestimated. How much so? I don’t know. But it’s to the point where, in a sane society, the US should print money until inflation actually shows up as more than a blip around 2%.

  3. Where’s the inflation? We’re not seeing it in wages, but we are seeing it in commodities and food costs, housing, healthcare, education, clothing , and of course asset prices. There’s plenty of inflation around.

  4. Great piece, H. Got to see a bit more of you. Also liked your comments about AOC earlier today. I don’t like her very much — probably because of my age — but her recent comments have been more reasonable a she seems to be acquiring some polish and even a bit of wisdom recently. As to economists; I say a again they should have term limits.

  5. I don’t get the minimum wage debate. There are studies on both sides of the issue–it kills jobs or it has no material impact. Democrats believe that latter, and if that is the case why not $50/hour?

    1. You’re posing a straw man.

      Of course it has an impact at some point. But not at $15.

      If all you intend to do is trot out straw men and erect windmills to tilt at, I’m not sure there’s much point in your debating the issue.

      Your question is conceptually similar to sarcastically asking this: “Well, since we can apparently send a total of $3,200 to individuals over the course of a year in direct aid, why not send them all $3.2 million in free money?”

      I’d respectfully ask that if you aren’t going to seriously engage in the conversation that you refrain from engaging.

      Rolling out straw men arguments in comment threads isn’t constructive and is conducive to needlessly contentious exchanges.

  6. One of the obvious problems is how we measure inflation is completely flawed. My costs of living have far exceeded official inflation (CPI) over the past few years. This metric is so important in our lives but yet, by simplifying it we have allowed for it to be abused.

  7. I wish more people with a big voice would see things this way. Sometimes when you stop to think about the lack of weight that facts, science and rational thinking have, it helps to stave off insanity to at least entertain the idea that you could be dreaming.

  8. One problem with inflation, for those of us who are pensioners, is that the government’s skewed claimed rate of inflation isn’t accurate for those who receive, and depend on, an inflation adjusted raise in income to maintain their status of living.

  9. Wow, great piece. Funny, I’m 71, but I love AOC. She is the only glimmer of hope that I see and the GOP sees it too. Righties down the line went after her on day one and she only grows.

NEWSROOM crewneck & prints